Snyder has ‘reservations’ about House road funding plan
Lansing – — Gov. Rick Snyder said Friday he has “serious reservations” with a plan the House passed Thursday that relies on existing tax revenue to fix Michigan’s roads, but stopped short of saying he’d veto the legislation.
“I don’t foresee it going through,” Snyder said after touring a highway overpass bridge over Interstate 96 in Lansing that is being held up by temporary supports.
The House on Thursday narrowly passed Speaker Jase Bolger’s plan to repeal the sales tax on gasoline and essentially swap that levy for a replacement tax dedicated to roads that would be gradually phased in over six years while the sales tax is phased out.
The complicated plan contains a clause that seeks to hold schools and cities harmless from a loss in the sales tax revenue they get from fuel purchases. The House plan relies on growth in the economy to replenish the state’s coffers and ensure funding for schools and municipalities is not harmed.
Snyder, state transportation director Kirk Steudle, Lansing Mayor Virg Bernero and others business and government leaders held a roundtable discussion on road funding Friday afternoon at the headquarters of the Two Men and A Truck moving company in Delhi Township.
The Republican governor said the House plan is insufficient for the state’s road funding needs and expressed concern it could endanger other areas of the state budget.
“We have to raise revenue,” Snyder told reporters. “And if you look at the magnitude, it needs to be $1.2 billion.”
Snyder said he’s concerned the House plan takes six years to get to the $1.2 billion revenue goal, while the Senate plan does it within four.
“That’s longer than I think appropriate,” Snyder said.
The House plan bypasses the state’s normal funding system for roads and does not include any new money for mass transportation systems, he said.
“There’s a number of challenges and questions that I think are real problems,” Snyder said.
Snyder said he prefers a Senate-passed bill that more than doubles the 19-cents-per-gallon gas tax by 2018 to generate an extra $1.2 billion annually for road repairs.
“The Senate plan is a solution that works,” Snyder told reporters after surveying the I-96 overpass with Steudle.
Snyder is trying to strike a deal with lawmakers to raise more money for roads before the Legislature adjourns for the year Dec. 18. Lawmakers have two more weeks remaining in the “lame duck” session to reach a compromise.
State Rep. Tom Leonard, R-DeWitt Township, attended the road funding roundtable with other Lansing-area legislators. He voted for Bolger’s plan Thursday.
“What this plan does is it asks our government, our politicians to do exactly what ... hard-working families do and that’s work within their budget,” Leonard told The Detroit News. “It forces us to prioritize, focus on infrastructure, roads, public safety and education. That’s exactly what we’re doing.”
Critics say the House plan could starve other areas of state government and lead to a loss in revenue for schools and cities when adjusted for inflation.
“How is something held (harmless) if they don’t get any kind of inflationary increase?” said Mitch Bean, former director of the non-partisan House Fiscal Agency. “This is kind of a redefinition of terms. ... Their rhetoric obfuscates the reality of the impact.”
Bean’s Eaton Rapids-based Great Lakes Economic Consulting analyzed the Bolger plan for education groups that are fighting the legislation because it takes tax dollars from the pot of money schools rely on for operations.